Wave of New BMW and Mercedes Models Threatens Lincoln and Cadillac

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BMW has the financial wherewithal to launch “40 variants” to its model line. Those are 40 new options that luxury car buyers will have from just one company, which is one of the world’s leaders in the industry. General Motor Co.’s (NYSE: GM) Cadillac and Ford Motor Co.’s (NYSE: F) Lincoln have struggles with very limited numbers of models. The BMW decision makes the problem worse.

According to Automotive News:

BMW Group plans the biggest rollout of new and revamped models in its history as the automaker fights back after losing the sales crown to Mercedes-Benz.

The magazine says these new models will range between the “new X2 compact SUV and full-sized X7 crossover.” That means the new cars will run from the least expensive to nearly the most expensive.

Among the reasons for the huge investment is competition with arch rival Mercedes, the global sales of which have moved ahead of BMW. The fallout will be felt, however, among the smaller luxury car companies. In America, that means, among others, the struggling domestics Cadillac and Lincoln.

Cadillac’s model line includes its ATS and CTS sedans, sales of which have fallen by more than a third in the first two months of the year. Sales of its huge Escalade are also down. Sales of its XTS sedan are down 25%. The only model that has done well is the new XT5 crossover. However, the model’s sales were only 8,174 in the first two months of 2017. And these models are nearly all Cadillac has in its model line against the much larger model lines of BMW and Mercedes.

Lincoln’s model line problem is even more severe. Lincoln sells two cars and four sport utility vehicles. Sales comparisons for the new Continental cannot be made to last year, because it did not exist then. In the first two months of the year, Lincoln sold 2,246 Continentals. Sales of the MKC and MKX rose. The MKC model had sales of 3,627, up 14% for the first two months. MKX sales rose 20% to 5,318. However, a model line with such limited numbers of options has a huge challenge to compete with those of BMW and Mercedes.

Industry experts often make the observation that Lincoln and Cadillac cannot compete with Mercedes and BMW because of the power of the two German brands. The size of their model lines is also an issue, and the flood of new BMWs sets an even higher bar.